Improving our

Performance:
a strategy for the voluntary
and community sector

Executive Summary
Improving our
Performance:
a strategy for the voluntary
and community sector

Executive Summary
1 CONTEXT FOR THE STRATEGY
Many voluntary and community organisations (VCOs) are skilled in delivering innovative projects and essential services on scant
resources; they have a clear mission and goals; and they play a vital role in their local communities. The best VCOs also strive to
continuously improve their performance: to do more and to do better. Planning, managing, measuring and reporting their perform-
ance in a systematic way can help them achieve this.
This document summarises the key points from a strategy for performance improvement, commissioned by the Home Office, devel-
oped by and for the English Voluntary and Community Sector (VCS) and overseen by an independent Steering Group chaired by
Professor Ian Bruce. The strategy aims to help VCOs plan, develop, measure and report more systematically on their performance.
‘Performance improvement’ is used to describe the process of:
“increasing the impact of an organisation in fulfilling its aims and objectives for the maximum benefit of
its users/members and the cause.”
In parallel with this strategy, the government has also commissioned strategies on governance, skills development and infrastructure
(including information and communications technology). These four strategies are feeding into a Capacity Building and
Infrastructure Framework (CBIF) for the VCS. £80 million has been made available via the Active Community Unit (ACU) to imple-
ment the CBIF over the next two years. This document makes a number of recommendations for the use of this funding to support
performance improvement in the VCS, as well as a number of broader recommendations.
The performance improvement strategy was developed collaboratively through an intensive research and consultation programme,
carried out over a six-month period. In all, over 700 people from across the sector have contributed their ideas and comments.
This document aims to influence government spending. However, it also includes recommendations for individual VCOs including
infrastructure organisations. It also considers the practice of funders, purchasers, and regulators and makes recommendations
addressed to them. It sets out a framework for future action from which an implementation plan will be developed.
2 VISION, AIM, OBJECTIVES AND OUTCOMES

2.1 Vision
Our vision is of a VCS that has confidence in its own ability to improve its performance supported by access to high quality informa-
tion, advice and support at a local, sub-regional and national level.

2.2 Aim and Objectives of the strategy

The primary aim of this strategy is to help VCOs better achieve their missions. In order to achieve this aim, the strategy has three
main objectives, namely to:
• increase VCS understanding of performance improvement, and raise awareness of the different approaches and tools available and
their appropriate use;
• ensure that the VCS has access to the information, advice and support on performance improvement that it needs;
• increase funders’ and regulators’ awareness and understanding of VCS approaches to performance improvement and their own
role in relation to these.

2.3 Expected outcomes of the strategy

The strategy sets out a challenging agenda. It proposes major changes in the way that English VCOs are managed, funded, supported
and regulated. Such changes will not take place overnight – they may take some years to come to fruition. The expected outcomes
for the strategy will be:
• Improved outcomes for users/members and the cause of individual VCOs;
• More VCOs using performance improvement approaches and tools to continuously monitor and enhance their activities;
• More VCOs able to demonstrate and report improvements in organisational efficiency;
• Funders making a greater, and more timely investment to improve the performance of the organisations they support;
• A reduced reporting burden for VCOs.

3 UNDERPINNING PRINCIPLES
This strategy has the following underpinning principles:
Independence. It recognises the independence of VCOs – hence the emphasis on enabling VCOs to better achieve their missions.
Diversity. The VCS is large, diverse and constantly evolving. This strategy seeks to reflect that diversity and make recommendations
that are of relevance and use to the broadest possible range of VCOs.
Enabling the sector to achieve its potential. The strategy aims to raise awareness of different approaches to, and tools for,
performance improvement in the VCS and to enable VCOs to base their efforts on approaches that are likely to be effective. It also
acknowledges that funders and commissioners can play a more constructive role in supporting performance improvement in the VCS.
Build on existing work. The research for this strategy revealed examples of good practice in performance improvement in the VCS
by VCOs, infrastructure organisations and others. Valuable initiatives of this kind should be built on.
4 THE CHALLENGES OF PERFORMANCE IMPROVEMENT
The research, consultation and interviews conducted suggested that VCOs face a number of challenges when they try to take a system-
atic approach to performance improvement. For example, they find it difficult to:
• plan and act strategically – short-term funding cycles and constant fire-fighting force many to be opportunistic;
• base their actions on a sound diagnosis of their organisational health – external help is often required to objectively
identify issues and to prioritise and many, particularly small VCOs lack the resources to purchase it;
• identify which performance improvement tools or approaches would most help them – many VCOs are confused about
the choice of performance improvement approaches and tools on offer, and the benefits they can bring;
• measure their effectiveness – measuring effectiveness relies on good information systems – expertise is needed to set them up
and they can be expensive;
• invest in ‘back office’ functions – since many VCOs and their funders consider that virtually all their resources should be used
for direct service provision, they fail to invest adequately in support functions such as HR, finance and information technology;
• invest in quality – when faced with pressing social needs, many Boards want to do ‘more rather than better’. They may be scep-
tical about whether ‘quality’ initiatives imposed by funders and regulators really make a difference to outcomes for service users;
• be open about their performance – some VCOs lack the confidence to report openly. Funding depends on success, and open-
ness about difficulties may be off-putting for donors.
In addition to these internal challenges, despite many examples of good practice (some of which are highlighted in the strategy)
there are two main external difficulties:
• A lack of understanding by some funders – Some grant givers and purchasers have little understanding of how different
approaches and tools enable VCOs to tackle different aspects of performance improvement. Some tend to be unrealistic about what
quality standards can deliver or do not appreciate that use of a quality standard takes time to feed through into service improvements.
• Patchy support services – There is some high quality provision for example at the national level QSTG and Charities Evaluation
Services and at the local level sub-regional performance improvement partnerships. However, existing support is patchy in a
number of respects. Some initiatives tend to focus on particular approaches or tools rather than taking a holistic approach.
Support is also geographically patchy. Some approaches are also better served than others. And finally, existing initiatives are rela-
tively small scale given the potential demand and most rely on short term funding.

5 RECOMMENDATIONS
The following seven core proposals summarise the 38 recommendations made by the Strategy for Performance Improvement
Steering Group. The full strategy report annex describes these recommendations in full.
5.1 The funding environment (Recommendations 2 to 16)
A funding environment more conducive to performance improvement is a top priority. Funders (both grant givers and
purchasers) should make provision in grants and contracts to enable VCOs to purchase support for performance
improvement. This would help funders to safeguard their investment and ensure they are supporting high quality work.
Funders also need to be clearer about the impact of the requirements they are placing on VCOs. A theme of our research was the
need not only to build the capacity of the VCS as regards performance management, measurement and reporting, but also the need
to improve funders’ understanding. Funding should be earmarked for a programme of work building funder knowledge
and influencing their practice. Initially efforts might be concentrated on a small group of leading edge funders including
progressive local statutory sector funders – at a local level compacts may be a means to take this work forward.
(continued overleaf)
5.2 The provision of support at the local level (Recommendations 17 to 22)
There is universal agreement that VCOs, particularly small VCOs, derive the greatest benefit from face-to-face support, to help them
diagnose any issues they may need to address, to determine where they might best concentrate their efforts to improve and to facili-
tate improvement.
Face-to-face support to VCOs for performance improvement should be available in every local area. This should be
enabled by sub-regional partnerships which bring together all the agencies in a particular area concerned with performance
improvement, including Councils for Voluntary Service (CVS), Rural Community Councils (RCCs), social enterprise networks, devel-
opment trusts and other organisations which can help. These partnerships should be funded to come together to assess
need and to develop and implement plans for meeting it. Approaches likely to be needed include strategic planning and
marketing; outcomes and impact measurement; quality systems, standards and frameworks; benchmarking and the sharing of
resources; and the role of reporting.
The intention is that these sub-regional partnerships should be developed based on the experience of existing similar
partnerships involving CVS and other local development agencies. They should also build on good practice such as
‘cascade’ training, peer review and mentoring schemes, pro bono and other consultancy, secondment and other support schemes.
Measures need to be put in place to secure the quality of face-to-face support. A delivery model/s should be developed
based on a partnership of existing expert bodies.
There is a need for focused support for BME VCOs. The sub-regional partnerships proposed should take this on
board but there may be a need for a specialist function to ensure appropriate advice and support is available.

5.3 Providing accessible information/developing practice (Recommendations 23 to 27)

It is recommended that the bulk of the funding available to implement this strategy should be spent on the develop-
ment of local provision (as described above). However, our research also demonstrated the need for a national
resource to support performance improvement in the VCS. The presumption is that this should be an inclusive partnership
of existing organisations with expertise, rather than a new body.
This national resource would have seven main functions, to:
• analyse existing materials and fill any gaps directly or by commissioning;
• signpost to other sources of advice, information and support
• help develop the practice of individual VCOs;
• support sub-regional partnerships, specialist infrastructure organisations and nationals with a federated struc-
ture in their performance improvement work with local organisations and other members;
• evaluate different approaches to performance improvement used in the sector, and feed back the results to VCOs
and funders;
• influence the practice of funders, purchasers and regulators;
• oversee the implementation of this strategy with the support of an independent advisory group.

5.4 Examining the role of specialist infrastructure organisations and national organisations with a
federated structure (Recommendations 28 to 30)
Specialist infrastructure organisations and national organisations with a federated structure are regarded as having a valuable role to
play in supporting the performance improvement efforts of their members. Further work should be undertaken by the national
resource examining the performance improvement role of specialist infrastructure organisations and networks and national organ-
isations with a federated structure. This should assess the contribution that they are making to support the performance of their
members and how they might be supported in consolidating and developing this work.
Our research suggested that VCOs need to claim back control of the performance improvement agenda. To help VCOs achieve this it
is proposed that further work be done in the VCS examining the issue of appropriate performance indicators for different sub sectors
and examining the relationship between these indicators and the requirements of regulators and major funders.
5.5 Reducing the bureaucratic burden (Recommendations 31 to 35)
The external imposition of particular quality standards or approaches to performance improvement by funders, purchasers and
regulators has generated resistance in many VCOs. The cumulative implementation, monitoring and reporting burden can be very great.
Funders, purchasers and regulators should take steps to reduce this burden by:
• encouraging self assessment;
• encouraging VCOs to develop their own approaches to performance improvement;
• rewarding good performance by adopting a lighter touch – for example, less frequent monitoring and inspection;
• focusing on outcomes rather than imposing other overly prescriptive requirements.
Further work should be done by the Better Regulation Taskforce to examine effective ‘passporting’ between different
quality standards.

5.6 Making links with the other related strategies (Recommendation 37)
VCOs emphasise that problems with governance and difficulties in recruiting and retaining the right staff are both major barriers to
development. In addition, many VCOs feel that they lack the expertise to determine which performance information they might best
collect, and how to store and process it. VCOs also emphasise the need to ensure that infrastructure organisations are supported in
delivering the Capacity Building and Infrastructure Framework and have access to sufficient resources to develop appropriate
performance management and measurement systems for their own organisation, in order to better achieve their own missions.
It is proposed that the ACU should give the above issues further consideration as it continues to develop work on performance, skills,
governance and infrastructure (including ICT).

5.7 Monitoring and measuring performance in achieving the strategy’s objectives

(Recommendation 38)
It is proposed that an independent advisory group be established to develop an implementation plan for this strategy and to monitor
its progress. A small secretariat, funded through this strategy, should be established to support the independent advisory group. This
secretariat should be based within the national resource.
It will be crucially important that activity supported through this strategy is fully and properly evaluated so that learning can be fed
back into the development of, and decisions about the funding of, infrastructure services in the future. Some of the funding available
for implementation should be earmarked for this evaluation.

April 2004
Published by the Quality Standards Task Group
NCVO
Regents Wharf
8 All Saints Street
London N1 9RL
Tel: 020 7520 2540
Email: qstg@ncvo-vol.org.uk
Copies of the full report, background papers and a list of people consulted are available from QSTG (contact details as above)